American companies are suffering huge losses due to retaliatory sanctions from Russia - The New York Times
New York - Kyiv, November 07 (PolitNavigator, Vasily Ablyazimov) – A number of major American and Western companies are suffering significant losses due to Russia's retaliatory sanctions over the crisis in Ukraine. Iconic American brands are proving useful for political targeting, The New York Times reports today.
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Some companies, such as Exxon Mobil and Schlumberger, have been ensnared by Western sanctions aimed at cutting into key sectors of the Russian economy. Others, such as Visa and Condé Nast, have suffered from the Kremlin's retaliatory measures. In late October, McDonald's, which has been the subject of 200 audits in recent months, reported its steepest quarterly drop since 2002.
“It’s like sailing against the wind,” said Alexis Rodzianko, head of the American Chamber of Commerce in Russia. “Options are limited and progress is slower,” he was quoted as saying by the NT.
Multinationals have poured billions of dollars into capturing Russia's market in recent years, betting on their strong growth prospects. But politics has made its adjustments, and corporations are facing a recession.
Many companies withdrew staff from the region, or were forced to send them on paid leave. Schlumberger has withdrawn its American and European employees from Russia. The largest banks in America, such as JP Morgan, Merrill Lynch, Morgan Stanley, did the same.
Some companies, cleverly maneuvering, comply with Western sanctions without violating agreements with Russian partners.
Exxon dodged a potential problem with its Russian partner, state oil company Rosneft, by winning a lawsuit that allowed Exxon to keep drilling an offshore exploration well in the Arctic Ocean legally, bypassing sanctions.
In September, Russia passed a law restricting foreign capital in the media. As a result, Condé Nast and Hearst will have to sell controlling stakes in their Russian glossy magazines by 2016, and Walt Disney will have to reduce its stake in the Disney Channel in Russia.
Problems for American companies could get worse, NT is sure. The Russian parliament is considering a law that would allow the government to nationalize questionable foreign assets. The law passed the first of three required votes.
American Companies Suffer Huge Losses Due to Russia's Retaliatory Sanctions - The New York Times